Daunting year

2016 promises to be a daunting year.

There are formidable challenges waiting us for which we must prepare adequately or face the danger of unmanaged turbulence which will result in crisis and social destabilization.

In the event of a crisis, panic and bad decision-making are inevitable.

There is no doubt that 2015 has been a very difficult year; sadly 2016 could even be worse. The rain deficit could deepen the already stringent load shedding. The bumper harvests we have become accustomed to could turn into a generalized food deficit. These are daunting prospects we must prepare for.

There is no doubt that the Government is facing both economic and political challenges arising from the   circumstances that we are facing. Fiscal slippage is the one temptation the Government must not fall into to ameliorate these difficulties.

The establishment and inculcation of a culture of fiscal discipline may constitute one of the biggest challenges the Government is facing. This will require that expenditure is curtailed to keep runaway inflation in check. 

These measures will force Government to implement politically unpalatable measures on which the opposition will feast to make political capital and mileage. 

Apart from politicians there are those with a negative agenda who will misinterpret and in some cases convince the gullible against the measures by ascribing them to bad leadership and  poor administrative practice.

They will deliberately fail to recognize the economic downturn that Zambia and other countries are facing as a result of economic slowdown in China, rout of commodity prices and a general deficit in copper demand.

Their case will be delivered with eloquence and persuasive fervor as to demoralize and perhaps dissuade Government from the measure.   It should be remembered that change in all cases is inevitable and change in this case should be considered an opportunity for advancement.

It gives the country an opportunity to seriously evaluate and eliminate areas of waste and excesses.

Instead of subsidies the Government must cut to the bone and invest in productive sectors that will make a meaningful return rather than fuelling consumption.  Failure to take advantage of the situation of the crisis that we are facing will prolong consumption and wasteful expenditure.

However, in implementing fiscal discipline expertise and experience should be employed to identify areas of the economy which can be adjusted to reflect Government priority.

For example, and as we have said before, Government must now seriously look at the fuel bill and determine how best it can be managed.  We have experts, financial wizards and of course energy experts who can help the country rationalize the procurement of fuel feedstock to take account of the very low prices of crude oil currently ruling on the market.

Brent crude oil has gone as low as US$35 per barrel and it is unlikely to get back to the more than US$100 – the original price.

Ironically we continue to pay the old prices as if we were impervious to the influence of the global economy.  There is need for very serious reflection, consultation and large scale extensive tendering to ensure that we procure the most cost effective fuel even if this means forward buying from suppliers.

The Government must invest in think tanks and experts who will help advise and marshal the nation towards a course of effective adaptation.

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